If there’s one part of the president’s healthcare law (Obamacare) that Americans know they don’t like, it’s the law’s “individual mandate.” When the Kaiser Family Foundation polled Americans about their views on Obamacare earlier this year, it found that the mandate had the support of just 30 percent of respondents. If people don’t like the individual mandate much now, they will like it a whole lot less when it becomes part of their annual tax filings with the IRS.
Starting in 2014, most Americans will have to purchase “qualifying” health insurance. This insurance plan can be an employer-provided plan, a plan from the individual market, or a government plan like Medicare, Medicaid, and veterans’ care. What all these plans will have in common is that they must be approved as qualified by the Department of Health and Human Services (HHS), which will get to mandate what each plan must cover and how.
Failure to obtain qualifying coverage could result in payment of a tax penalty to the IRS. Depending on family size, the tax penalty will range from $695 to $2,085 (plus inflation). For many families, a higher penalty of 2.5 percent of adjusted gross income (AGI) will apply.